Study On The Relevance Between Corporate Governance Structure And Auditor Switching Of Companies

With the development of China's securities market, the quality of accounting information has now turned into the focus of the entire market. The accounting firm as an external inde- pendent auditing body has been seen as the "economic police". More and more public attention is able to improve the quality of accounting information. However, in recent years, the changing of accounting firms by listed companies increased steadily. There are many malicious acts to change auditors. This situation has aroused widespread concern in the community. Many aspects of the accounting firm switching have been stu- died and many results has been acquired. Based on the existing literatures, a found has been made to dig into the causes of switching, the market reaction after the change and the firm's information disc- losure regulation are on the main aspects of the theoretical circle.The generation of an act is bound to the structure of the system, and corporate governance structure of listed companies as institutional arrangements to solve principal-agent problem, which will certainly impact the change of the accounting firm. The study on correlation between corporate governance structures and accounting switching is small. This article focuses on corporate governance structure to of study the impact of change. The change of accounting firm exists of two types: change that is voluntary as well as regulatory. The regulatory change is due to some provisions of the regulatory authorities; the changes can be regarded as normal behavior. But the voluntary change is often proposed by the listed company, or by the accounting firm. With one possible replacement for some malicious purpose firms, the scope of this study involves voluntary changes occurred in listed companies.By mentioning corporate governance structure, this paper is looking from the angle of internal governance perspective. The corporate governance structure as a system arrangement balances the relationship including ownership structure, board of supervisors and the management.Then, this paper analyzes the basis of the relevant basic theory, from principal-agent theory, asymmetric information and signaling theory. Using Logistic regression analysis to test the correlation between corporate governance structures and accounting firm switching. There has been concluded that the ultimate controllers, stock equilibrium degree, the proportion of independent directors and board meetings have important influence on the switching of accounting firms.Finally, on the base of positive analysis, recommendations are given to improve the governance structure of listed companies, including improved equity ownership structure, improvement and increases of the proportion of independent directors and the board diligence.